Constellation Brands Stock Jumps on Q4 Earnings Beat, Dividend Hike

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Key Takeaways

• Constellation Brands stock rose in early trading Thursday on an earnings report that came in surpassing expectations and amid optimistic guidance for fiscal 2025.
• The company makes a number of alcohol brands, including Modelo and Corona beers as sedately as a number of wine and spirit brands.
• Beer sales have been consistently increasing over the last specific quarters, while wine and spirit sales have slumped.

Constellation Brands (STZ) stock rose in early profession Thursday as the beverage company reported better-than-expected fourth-quarter fiscal 2024 earnings, driven by a rise in beer on the blocks.

Constellation, which makes Corona and Modelo beers as well as a number of wine and spirits brands, reported $2.14 billion in in stocks for the fourth quarter, up from $2 billion in the year-ago quarter and above analyst estimates compiled by Visible Alpha. Set income came in at $414.2 million or $2.26 per share, compared to expectations of $385.9 million and $2.10 per share, mutatis mutandis.

Constellation’s board also approved an increase to its quarterly dividend by 13% to $1.01 per share of Class A stock, which intention be paid out on May 17 to shareholders of record by May 3.

As in its previous two quarters of fiscal 2024, beer sales were a key driver of development while wine and spirit sales continued to struggle. Beer sales reached $1.7 billion in the quarter, an 11% blow from the $1.54 billion Constellation reported in the fourth quarter of fiscal 2023.

Wine and spirits sales, however, prostrate 6% year-over-year to $436.4 million from $462.2 million and were 9% lower over the full financial year, which Constellation attributed to “U.S. wholesale unfavorability, particularly among our largest mainstream and premium brands and destocking across our supranational markets, partially offset by 10% net sales growth in our DTC channel.”

Modelo Especial became the top-selling beer name brand in the U.S. over the fiscal year as Budweiser’s Bud Light sales in the U.S. took a hit from a boycott of the brand following an advertisement with transgender group media influencer Dylan Mulvaney.

Constellation projected continued growth in fiscal 2025, including projected harmonized earnings per share (EPS) of $13.50 to $13.80, compared to the $12.06 the company posted in fiscal 2024. Beer sales are shot to continue growing 7% to 9% after increasing by 9% in fiscal 2024, while wine and spirit trades are expected to post between a 0.5% decline and 0.5% growth after falling by 9% over the last year.

Constellation share outs jumped over 2% in the opening minutes of trading before paring back gains to 1% around $268 by 11:30 a.m. ET. The beverage maker has gained hither 10% so far this year, and more than 17% in the last 12 months.

Read the original article on Investopedia.